As large enterprises search for solutions to get the most out of their outsourcing vendors, many are turning to operational frameworks like Information Technology Infrastructure Library (ITIL) to improve the effectiveness of IT service delivery.
While ITIL is commonly adopted as the standard for IT service management best practices, its current framework does not provide a road map for achieving its proposed end-state. Additionally, the complex and time-intensive task of aligning service providers and contracts makes ITIL adoption challenging for enterprises that outsource.
A competency-based ITIL maturity model can successfully reduce the risks of traditional approaches, which often require a full contract renegotiation with outsourced vendors. Specifically, it can be used as a template to assess, monitor and manage an organization's progress against ITIL's best practices; serve as a guide to plan the organization's targets for achieving full ITIL maturity; and enable companies to hold partners accountable for ITIL alignment and performance.
The maturity model discussed here relies on a multi-dimensional perspective, providing a more complete view of an organization's maturity and the likely complexity of change required for ITIL adoption. For companies with IT services outsourcing agreements, the approach reduces process uncertainty and enhances common understanding of the overall journey. In addition, the approach aligns well with organizational change management philosophies that promote acceptance and adoption. Organizations must understand their level of maturity across the five dimensions.
Organizations will ultimately align with one of the five phases identified in this model, but assessing the levels of maturity is a subjective process. It is most successful when deployed through small workshops facilitated by a senior-level individual with ITIL experience, as well as participation from managerial and operational lead-level professionals from both the organization and outsourcing vendors. The five levels of maturity are defined as:
* Ad Hoc: No formal definition of the function exists and activities are most frequently performed in an inconsistent and event driven (ad-hoc) manner.
* Aware: The function, or an "awareness" of the necessity for the function, exists. However, the definition and scope varies and is often driven by organizational structure or alignment.
* Managing: The organization recognizes the need for, and understands the benefits of, performing and managing function/activities in a formal and consistent manner.
* Improving: The organization proactively manages the function for improvement and is deploying quantified functional performance measurements.
* Optimizing: The organization proactively redefines functions/activities, processes and outcomes to optimize the function's performance based on changing needs of the business.
The Maturity Model in Action
To illustrate, this is how an IT service manager would apply the maturity model for Incident Management:
1. Conceptual Understanding: Starting with Conceptual Understanding, organizations will review the definitions and map themselves to the one that most closely describes their current overall state. A common mistake is aligning an organization's maturity level with the internal Policy and Procedures Manual or to senior executives' expectations.
2. Process: Organizations must address these key aspects to measure and track their maturation:
• The degree of process standardization across an organization.
• Completeness and clarity of roles and responsibilities within each process.
• Completeness of knowledge management process and degree of organizational adoption.
• Completeness that process interfaces, data dependencies, and exchanges between vendors are understood throughout the organization.
3. Activities: Key activities to be measured and tracked against an organization's maturation are:
• Clarity, completeness, and standardization of identification of an incident.
• Consistency, standardization of methodology, and accuracy of incident logging.
• Consistency and accuracy of incident classification.
• Consistency and accuracy of incident prioritization.
• Completeness and standardization of the escalation and resolution process.
• Consistency and accuracy of incident closure.
4. Performance: The Performance dimension requires a clear and well-defined set of measurements, including metrics, critical success factors, and risk mitigation practices. Understanding the process, how vendor SLAs impact the process, key handoffs between vendors and your company, and managing as a single end-end process are critical for understanding and managing performance. Companies fully embracing performance management have deployed scorecarding or other objective measures to measure and discuss performance on a regular basis.
5. Governance: As an organization travels through the maturity model, the expectations and requirements of governance — to improve the alignment between process performance and business needs while actively working to gain support from organizational leaders and define the value of ITIL — will increase.
Using the above criteria, the IT service manager will be able to place the function on one of the five levels of maturity for each defined measurement. Keep in mind that the function may often be on the borderline of two maturity levels. The IT Service Manager can then rank the function's average maturity within each dimension (i.e., conceptual understanding, activities, process, performance, and governance) and subsequently define the function's average maturity overall.
The maturity model is designed with an ITIL aligned end-state point of reference in which the organization proactively optimizes the function's performance and relies on competency-based maturity phases that an organization must pass through to achieve that end-state. This phased-migration methodology has provided value to organizations across four main areas:
Tangible, well-defined goals: A competency-based maturity model defines short, mid- and long-term goals for a function at the material level, allowing managers to transform ITIL from a best-practice, high-level model to a set of achievable wins.
Road map for transformation: Understanding the function's current level of maturity, as well as the detailed steps necessary to achieve the next level, allows an organization to define a realistic timeline for migration and avoids the misstep of underestimating the effort ITIL may require to adopt successfully.
Stakeholder alignment: The process of assessing a function's maturity will often require the input of multiple stakeholders, including both leadership and IT service staff. It allows an organization to level set on the function's current competency and future road map.
Vendor support: For organizations with outsourcing vendors providing IT services, a change will naturally introduce uncertainty into the relationship. Identifying the ITIL end state and the migration path allows the vendor to anticipate an organization's changes and, in many cases, accelerate the transition by adopting corresponding and supporting activities. Most vendors welcome ITIL-based improvements.
The complexity of implementing an ITIL-compliant environment increases when an IT organization's suppliers and partners must transform as well. Because the company often has little control over its suppliers outside of contractual means, managers must think creatively to influence their behavior. The Maturity Model productively communicates change and the migration path, allowing vendors the option to willingly support and enable the change. Most vendors support this approach without requiring a re-work of their contract.
In addition to tangible goals, a realistic road map, and a common understanding across the IT organization, transforming IT functions according to the competency-based maturity model helps to establish the critical characteristics of a successful and sustainable supplier relationship model.
These areas for transformation include:
* Governance activities: Moving into the improving maturity level requires a performance and compliance monitoring mechanism to manage agreed upon outcomes, measure and improve overall performance, and carry out any non-compliance interventions.
* Governance structure: The maturity model calls for formalizing roles and responsibilities within an IT function, such that:
• decision making responsibilities are clearly articulated and confined to the formal governance structure.
• recognized leaders from the retained organization and the supplier are appointed to the governance organization.
• objectives of the retained organization and the supplier are aligned to the overall goals of the company.
• roles , responsibilities and accountabilities of the retained organization and the supplier are clearly communicated.
* Process management: Parties must jointly assess the current processes and determine where each party "fits" in the outsourced, ITIL compliant environment. Documenting the retained and outsourced processes — as well as defining the process owners, triggers, dependencies and process outputs — ensures consistent application of and improves compliance with these processes.
* Continuous improvement: A mechanism is needed that facilitates the proactive identification of key trends, exploration of opportunities for continuous improvement and implementation of best-in-class practices in the IT service management function. Involving the supplier in this process can leverage the partner's own experience with ITIL, enables the sharing of supplier capabilities outside of its current services scope, and provides a forum for identifying, agreeing to and documenting any modifications to the existing service scope, performance and /or pricing of the outsourced processes.
When an organization aligns its IT service management functions with ITIL's best practices, it must decide which approach will yield the most predictable and positive outcome, as well as how to optimally include vendors. The competency-based maturity model provides a platform for eliciting support and a road map for the transformation. It not only helps to overcome the challenge of translating high-level objectives into realistic goals, but also can provide the framework for establishing a robust supplier relationship.
Pace Harmon is a third-party outsourcing advisory services firm providing guidance on complex outsourcing and strategic sourcing transactions, process optimization, and supplier program management. Founded in 2003 and based in the Washington, D.C. area, Pace Harmon provides pragmatic and insightful advice that helps its client base of Fortune 500 and other large enterprises maximize the benefits achieved from their mission-critical supplier relationships.
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